Wednesday, September 30, 2009

William Patry has a new book, Moral Panics and the Copyright Wars, which is driving me crazy. I disagree with so much of it (only one chapter in so far), I barely know where to start.

Patry is a recognized copyright expert, having published an apparently well-regarded multi-volume reference work on the subject. He drafted copyright laws while working in the US House of Representatives, and he's now Google's chief copyright expert.

He begins the book having already decided that the "copyright industries" (movie studios, record labels, book publishers, etc) are stupid, badly-managed, and don't deserve to survive.

He spends several pages discussing the "framing" of arguments, and how word choices affect the way people respond to arguments. He despises the use of terms like "pirate" or "theft" when talking about online file-sharing, as he believes that the use of such terms causes people to jump to the wrong conclusions.

Perhaps. But...

In the course of his first chapter, he likens the "copyright industries" to the old Soviet Politburo. And he compares the wisdom and actions of the "copyright industries" to Mao's ill-fated Cultural Revolution.

So it seems we should have no compunction about using the terms "pirate" and "theft".

Patry also spends several pages quoting Theodore Levitt's classic "Marketing Myopia" article, and arguing the stupidity of "push" marketing these days, when he says the internet has changed everything, and anyone with any brains gives consumers exactly what they want via "pull" marketing.

He says consumers want to download single tracks, while the record labels offered only albums on CDs, so it was only right and fair that consumers took matters into their own hands.

Let's see just what this means...

Say I want to buy just a single egg for a recipe, and the grocery wants me to buy a dozen. Should I feel justified in stealing the egg?

I know, some readers will object that the egg is a physical object, with inventory value, and that my theft would deprive the store of that value.

Well then, what about this one? I want a nice crisp hundred-dollar bill, but the bank won't give me one. Instead of stealing one, I could borrow a hundred from a friend, and make a copy at my own expense. Would that be OK? Like a consumer copying music files? It's not as though a single hundred would affect the economy, right?

Isn't theft still theft?

If I want to buy a single short story, but the bookstore has only a single-volume collection on the shelf, can I demand that they tear out and sell me just the one story that I want?

Of course not.

Just because the internet makes it possible to do something does not mean that it is right to do so.

Just because Patry (and many many others, of course) think that the record labels are badly managed by stupid people, to the point that Patry seems to think said companies should not even exist, does not make it right for a consumer to take matters into her own hands.

I'm curious to see if later chapters of Patry's book show clearer thinking.

Wednesday, September 23, 2009

Two weeks ago, Marybeth Peters, the US Register of Copyrights, harshly criticized the proposed Google Book Settlement in testimony before the House Judiciary Committee. That same day, David Drummond, Google's Chief Legal Officer, testified with a combination of verbal sleight-of-hand, obfuscation, and apples-to-kumquats comparisons. Last week, the US Department of Justice filed its critique with the judge overseeing the Settlement.

The critiques highlight a key point I raised earlier -- that unclaimed royalties for "orphan" books will ultimately be distributed to those authors and publishers who sign up with a newly formed Book Registry. In fact, the DOJ argues that this creates a schism between the owners of claimed and unclaimed books, thus rendering the "class" which claims to have filed the class-action suit invalid.

The critiques also make clear (as I have argued) that the settlement is a boon for Google in that it grants an effective monopoly on orphan books. No other company could obtain the same access without following in Google's footsteps: wholesale unauthorized scanning, followed by a lawsuit, followed by a settlement. Google actually seems to agree with this, stating "nothing in the settlement prevents anyone from doing what we have done." Google then attempts to evade the "monopolist" term by noting that the proposed Book Registry could "license to third parties to the extent allowed by law" [my emphasis]. Note, however, that what Google would gain from the Settlement is not "allowed by law," so that Google's monopoly is written into the settlement.

Google claims to be a new entrant to the book market with "zero market share". While Google may not yet be selling books, it is certainly selling ads placed next to book excerpts, which is how Google makes money in the first place. Google also claims that it would be too expensive and time-consuming to track down the owners of unclaimed books and negotiate with them; but it's hard to accept that Google's genius engineers and billions of dollars couldn't resolve this problem.

Google also claims that the proposed book registry's job "is to go out and find rightsholders." But that is certainly not the case. The registry has no incentive to find rightsholders. In fact, it has a dis-incentive: the fewer rightsholders who register at the registry, the more unclaimed money there will be; and that unclaimed money will first be used to pay expenses of the registry, and then the remainder will be distributed to those who did register. As the DOJ puts it, "The greater the economic exploitation of the works of unknown rightsholders by Google and the Registry, the stronger the incentive for known rightsholders to retain the unclaimed revenues for themselves."

Some choice quotes from Ms. Peters:

"We realized that the settlement was not really a settlement at all... Instead, the so-called settlement would create mechanisms by which Google could continue to scan with impunity,well into the future, and to our great surprise, create yet additional commercial products."

"the proposed settlement would give Google a license to infringe first and ask questions later"

"To allow a commercial entity to sell such works without consent is an end-run around copyright law as we know it."

"The question of whether a book is in-print (generally, in circulation commercially) or out-of-print (generally, no longer commercially available) is completely inconsequential as to whether the work is entitled to copyright protection under the law."

"certain provisions of the proposed settlement dramatically compromise the legal rights of authors, publishers and other persons who own out-of-print works."

And a few from the DOJ:

"The Proposed Settlement seeks to implement a forward-looking business arrangement rather than a settlement of past conduct"

"[the Proposed Settlement allows] the control of prices for orphan books by known publishers and authors with whose books the orphan books likely compete."

Saturday, September 5, 2009

It would have been a dereliction of duty by the executives at the studios and YouTube were they not talking. How can this possibly be a surprise? Why was it played as signficant "news" in the Wall Street Journal and the New York Times this week?

Of course YouTube is desperate to have legitimate big-name programming -- they need it in order to charge for advertising and/or charge for viewing. They have certainly been talking to (or trying to talk to) the studios for some time now.

And the studio execs are not stupid (having been one, and worked with them, I can vouch that many of them are actually very smart). They know YouTube has a huge audience, and they would of course love to monetize that audience. So it's reasonable to assume they've been talking as well.

So, given that we assumed they're already talking, is there actually anything to report? Are the talks leading to anything? Well, as the Times put it, "One studio executive... said the issues still to be resolved were pricing and the timing of YouTube releases." Right. This is like saying that the only unresolved issue remaining between Flat-Earthers and NASA is the shape of our planet. Come on, people.

And it took three reporters at the Journal and two reporters at the Times to bring us this "news".

(By the way, if any readers don't get the reference, the "I'm shocked, shocked..." quote comes from Casablanca, when Claude Rains' character, Capt. Louis Renault, feigns surprise at something he knew full well was going on.)